FTSE 100 dips as weaker commodity prices drag

By Shashwat Chauhan and Sruthi Shankar

(Reuters) -Britain’s FTSE 100 eased on Monday from a more than one-month closing peak, as heavyweight energy and mining stocks fell after a stronger dollar and concerns about China’s economy dragged down oil and metal prices.

The commodities-heavy FTSE 100 slipped 0.2%, after closing on Friday at its strongest level since Oct. 19.

Energy giants Shell and BP fell more than 1% as oil prices dipped, pressured by investor scepticism over the latest OPEC+ decision on supply cuts and uncertainty surrounding global fuel demand. [O/R]

London-listed miners such as Glencore, Rio Tinto and Anglo American slid between 2.7% and 3.7% as copper prices fell against a firm dollar, with further pressure coming from an increase in stocks in London Metal Exchange (LME) warehouses and resurfacing doubts over Chinese demand prospects. [MET/L]

“We appear to be seeing some profit-taking in miners after the broker upgrade inspired gains of Friday which saw Anglo American and Antofagasta pop higher,” noted Michael Hewson, chief market analyst at CMC Markets.

“BP and Shell are also acting as a drag on the back of further weakness in oil and gas prices.”

After broad market gains in November on hopes that the U.S. Federal Reserve is done hiking interest rates, investors are awaiting a slew of U.S. employment reports this week to gauge when the U.S. central bank is likely to start cutting rates.

“As ever, market narrative will be swayed by the outcome of the number, with the market hoping for a level which supports the likelihood of a soft landing, without being too strong so as to reopen the hiking debate,” Richard Hunter, head of markets at Interactive Investor, said.

Meanwhile, the Bank of England will make its next policy announcement on Dec. 14, with markets almost unanimously betting on no change.

Shares of Rolls-Royce rose 3.1% to touch a more than four-year high after J.P. Morgan upgraded the engineering firm to “overweight” from “neutral”.

The UK midcap index slipped 0.3%, having notched a near 7% gain in November.

888 Holdings jumped 19.1% to the top of the FTSE 250 index on a report the bookmaker rejected a 700 million pound ($886.69 mln) buyout offer from Playtech in July.

(Reporting by Shashwat Chauhan and Sruthi Shankar in Bengaluru; Editing by Janane Venkatraman and Alex Richardson)